SOFA-CFE Exam Questions

The reasons for allocating surplus usually relate to profit measurement and below which of the following is the example of allocation:

A company normally will generate maximum after-tax return on investments by investing in tax exempt instruments.

The tax effect of the 20 percent adjustment to what deduction depends on underwriting decisions?

If a coverage dispute should arise at some future time, the contract documentation can prove to be invaluable during:

Defining the company's objectives and activities, prepares its long-and-short-range plans, Controlling access to the company's assets and premises are all recorded in:

Responsibilities for safeguarding the company's assets, safeguarding critical transaction processing areas and procedures, internal control guidelines and policies are all most sig...

Control procedures can be circumvented by collusion.

What can capture efficiencies of scale, particularly for small companies, and avoid large investments in equipment and software, as well as ensuring standard procedures?

The purpose of the examination system for Insurance companies is:

Financial examinations are conducted at least once every five years by:

State regulations are established to ensure that claims are settled in a good faith manner

The ________________ of the state regulators is to ensure that the competition among insurance companies is maintained on a consistent and fair basis.

What provides a detailed study of the insurance company's internal accounting controls over a particular category of transactions?

What utilize company-provided financial data to review and approve rate filings and to gather industry statistics?

The role of which functions of an insurance company is to use and manage the funds generated in the other parts of the business to maximize the profitability of the entity as a who...

What is the main goal of a prudent investment strategy?

The greater interest rate sensitivity of the long-term asset will cause a reduction in the value of that asset which is lesser than the corresponding increase in the value of the s...

The primary reason for asset-liability matching is:

Which is the risk that a security will decline in value over time?

For bonds, which of the following is NOT the key component of market risk?

Market risk and reinvestment risk underscore the need for:

Estimating the premiums needed to fund future promises is called:

The task of estimating the liabilities for promises already made and not yet satisfied is called:

What protects the confidentiality of the material in both the report and the summary, and provides legal protection to the appointed actuary except in cases of fraud or willful mis...

An insurance company incurs ___________ as soon as an insured incident occurs.

The date used to define the group of claims to be included in estimated loss liabilities is called:

The cutoff date for data used in the estimation of loss and loss expense liabilities is called:

The date an insurer or its agent is informed of a claim is known as:

________________ is typically either the date of report to the insurer or the earlier of the dates of report to the insurer or the policyholder.

The total of the individual estimates of outstanding liability for recorded claims is the:

What is the estimated liability for claims reported but not yet recorded?

For a given financial statement, what should represent an insurer's best estimate of the liability?

Which of the following is the characteristic of an actuarially sound loss reserve?

What measure the amounts at risk in a book of business?

The frequency of loss is the:

In estimating loss and loss adjustment expense, the actuary attempts to group claims into:

_____________ can increase by dividing the data into homogeneous blocks or by increasing the amount of relevant data in each block.

An insurance company's net loss and loss adjustment expense liabilities are affected by the reinsurance it has purchased from other companies.

The greater the size of the Incurred but not reported (IBNR) liabilities, the longer the:

The catastrophe-in-transit (CIT) reserve should be included to cover the liability for the claims that remain unpaid and unrecorded.

What if change, will change the meaning of the transaction data that the actuary uses to estimate liabilities?

Changes in the ______________will trigger changes in the size and importance of the supplemental reserve.

What occurs when the policyholder has sustained the loss and usually settles quickly?

In _______________, the insurance company defends the policyholder for claims made by others.

The number of open claims per claims adjuster can affect the average time it takes to settle a claim.

Changes in the guidelines insurance companies give their claims adjusters for setting what will affect development patterns of insured losses?

What function within an insurance organization determines the standards, policies, and procedures for managing data?

Interest rates affect loss liabilities directly where these liabilities can be:

What involves analysis of the company's contact on an account-by-account (policyholder) basis?

Estimation of the industry total losses and of the percentage covered by this particular insurance company is called: